Megawati to relaunch multibillion-dollar projects

President Megawati Soekarnoputri is scheduled on Thursday to relaunch a number of projects worth billions of dollars, which were shelved in the wake of the 1997 economic crisis, The Jakarta Post reported on Tuesday.

The projects include a power project in Central Java, a number of toll road projects in East Java and a flood control project in Jakarta.

The relaunching ceremony will be held at the site of the Tanjung Jati B power plant project in Jepara, Central Java, one of the projects to be revived by the President.

The 1,329 Megawatt power plant, which was half finished prior to the crisis, had changed hands several times until Japanese construction firm Sumitomo agreed to continue the project in a joint venture, PT Central Java Power, with state electricity company PT PLN. Japan Bank for International Cooperation (JBIC) has agreed to provide US$1.65 billion in loans for the development of the project.

Aside from marking the resumption of the Tanjung Jati B project, Megawati is also to commend the success of PLN to renegotiate most of its contracts with independent power producers (IPP), director general of electricity and energy development Luluk Sumiarso at the Ministry of Energy and Mineral Resources said at a press conference.

PLN signed power purchase contracts with 27 IPPs prior to the crisis. In the wake of the crisis, most of the projects were suspended, which led to years of dispute involving PLN, the IPPs and the government. PLN recently claimed that it had managed to settle almost all of the disputes and had reached agreements on a new pricing formula for power produced by the IPPs.

Fearing the prospect of a power shortage, the government has been seeking hard to woo all power investors to revive their projects in the country. (*)